WakeUpNow formally terminate US MLM operations
The manner in which WakeUpNow’s demise in the US has been handled has been nothing short of spectacularly incompetent.
We first got a whiff something was up when top affiliates in the company began uploading YouTube videos and issuing statements about the company closing.
That was on the 10th of February.
Prior to those announcements and since then, right up until a few days ago, WakeUpNow corporate maintained radio silence on the issue. Well, on anything really.
There wasn’t a peep to be heard from WakeUpNow’s own website, nor their usually frequently updated social media profiles.
It was only on February 16th and WakeUpNow corporate finally came out of their shell, via a blog post from CEO Phil Polich.
Between Polich’s post and top affiliates announcing the end of the company, we covered a lawsuit filed by WakeUpNow against former CEO Kirby Cochran.
In it, WakeUpNow ignore the pitfalls of their own business model and attempt to peg all of the blame for the company’s demise on Cochran’s conduct.
Polich’s post serves to reinforce that viewpoint:
By taking advantage of the office of Chief Executive Officer, Kirby Cochran had made decisions that put the company on an irreparable negative trajectory; and sadly, he went to great lengths to keep many of these decisions secret from the rest of the management team and board of directors.
As we made progress, we continued to discover that Kirby Cochran’s deceptive actions had put the company in a position from which it could not recover.
In the end, his decisions for a privileged few outweighed the incredible heart and dedication of the many.
In their lawsuit, WakeUpNow are asking for some $70 million dollars in damages. Cochran meanwhile filed for bankruptcy earlier this month, leaving a question mark over WakeUpNow’s lawsuit moving forward.
In any event, my stance remains the same since news of the lawsuit broke.
If the allegations WakeUpNow are making against Cochran are true, in whole or part, then there’s no doubt said actions contributed to the collapse of the company.
But whatever measurable impact Cochran might have had, it surely dwarfs in comparison to WakeUpNow’s fundamentally flawed compensation plan.
When the core of your business model is “the more our affiliates sell to recruited affiliates, the more money we lose”, and when affiliates recruiting new affiliates generates by far the largest amount of sales activity in your company – any way you cut it you’re stuffed.
Trying to blame that on Kirby Cochran, short of acknowledging he was the CEO of an already-doomed ship and did nothing to prevent the inevitable collapse, is a poor attempt at scapegoating at best.
When I stepped in as CEO in September I did so with an additional personal investment, and every intention of righting the ship. As I worked with a group of outside financial analysts it became clear that the issues ran deeper than originally expected.
Together with Jason, we worked diligently for the last 120 days doing everything we possibly could to turn it around. We explored every option, turned over every rock, and connected with every contact we had.
Whatever Polich and Jason Elrod attempted to do over the past 120 days, it is clear they avoided doing the one thing that might have turned WakeUpNow around.
That being a complete restructuring of the compensation plan to favour retail sales instead of affiliate recruitment.
Of course that’s much easier said than done when none of your top-earning affiliates are focused on retail. WakeUpNow has fostered a culture of affiliate recruitment for as long as I can remember.
Much easier to claim you tried and then blame everything on Kirby Cochran blowing through a few hundred thousand dollars.
Ironically, the decision Polich and Elrod did finally arrive at saw them finally get rid of the MLM side of the business, which was what was causing them to blow through millions of dollars every year.
A rough deal for WakeUpNow’s affiliates who collectively are owed hundreds of thousands, if not millions of dollars in commissions. They would have no doubt much preferred to have seen a reworking of the compensation plan, even if many might not have embraced a retail-centric model.
For whatever reason though, Polich and Elrod instead have chosen to abandon them.
Effective immediately, WakeUpNow will cease all network marketing operations in the United States.
We will continue to sell our products, including Awaken Thunder and the WUN Fit line of products.
Is what little retail activity that was taking place within the company going to see it through? I doubt it.
And what of WakeUpNow’s activities in the rest of the world. Quite succinctly, they’ve singled out the US to cease operating in.
The US is of course the country in which the company owes the most amount of money to its affiliates, but how on Earth are they going to continue to push a flawed business model in other markets?
Alexa estimates of the traffic visiting the WakeUpNow website domain, 43.4% originates from Brazil.
One would certainly hope Elrod and Polich’s plan does not involve ongoing milking recruitment activity in Brazil to its inevitable collapse, simply to pay off their debts in the US.
With Elrod and Polich both based in the US, it’s unlikely they care about Brazilian regulations regarding recruitment-driven pyramid schemes in which little to no retail activity take place.
Ditto Peru (6%), Canada (2.8%) and Spain (2.6%), who along with the US (29.7%) round out the other top countries visiting the WakeUpNow website.
It goes without saying that our hearts are heavy over this decision. It wasn’t taken lightly, and it wasn’t done without understanding the impact on the lives of so many people that worked with us.
Our hope is that your life is better for having been a part of the #WUNLife. We hope you move on to what is next and be better because of the experiences you have had with WakeUpNow.
We hope you will remember the company for the way we changed the entire network marketing industry.
Philip J. Polich
WakeUpNow will most certainly be remembered Phillip, but not for changing the MLM industry for the better.